02-25-2010, 02:07 AM
Nice question. An Islamic scholar would be able to answer that one
In my opinion, when you lend money, the risks and rewards associated with the cash are transferred to the other party. For example, when you give cash, the risk of the cash being stolen and the benefit of higher exchange rates if the second party purchases and sells foreign currences
Where an asset is given, the risks and rewards remain with the lender. For example, risk of the building/property getting damaged and the benefit of increase in fair value if the lender is to immediately sell the land
If the risks and rewards are borne by the second party then why should the lender earn from it? Does not it seem illogical?
Well, this is what i concluded after thinking for few minutes upon reading your question
In my opinion, when you lend money, the risks and rewards associated with the cash are transferred to the other party. For example, when you give cash, the risk of the cash being stolen and the benefit of higher exchange rates if the second party purchases and sells foreign currences
Where an asset is given, the risks and rewards remain with the lender. For example, risk of the building/property getting damaged and the benefit of increase in fair value if the lender is to immediately sell the land
If the risks and rewards are borne by the second party then why should the lender earn from it? Does not it seem illogical?
Well, this is what i concluded after thinking for few minutes upon reading your question
